Interview| Ujjivan Small Finance Bank looking at overall growth of 25% in FY23-24, says MD & CEO, Ittira Davis

Ittira Davis- Ujjivan Small Finance Bank MD & CEO

Bangalore-based Ujjivan Small Finance Bank (Ujjivan SFB) is looking for an overall growth of 25 percent in the financial year 2023-24, said Managing Director (MD) and Chief Executive Officer (CEO) Ittira Davis in an exclusive interview with Moneycontrol on August 2.

He also said Ujjivan SFB is planning to open 20 asset centres in different parts of the country for the housing finance business. Davis added that they will apply for a universal bank licence in the next financial year. Edited excerpts from the interview:

Walk us through your growth plan.

We are expecting a minimum overall growth rate of about 25 percent in the financial year 2023-24. (In) asset quality, we are hoping that the NPAs (non-performing assets) will fall back to pre-COVID levels, gradually dropping towards the 1 percent level, especially in micro-banking.

The bank's asset quality improved in the June quarter, as gross non-performing assets (GNPAs) declined to 2.62 percent from 6.51 percent in the year-ago period. The net non-performing assets (NNPA) fell to 0.06 percent from 0.11 percent.

How are you looking at your housing finance businesses now?

Housing is our major growth area for this year. We are planning to launch 15 new asset centres by the end of this year. We have already opened four asset centres in Mysore, Coimbatore, Ahmedabad, and Jaipur.

These are centres where business, credit, legal, and some of the operations staff are all located. So they can respond quickly, the turnaround time is shortened, and issues can be addressed immediately.

How are you planning to add headcount this year?

Our total headcount has gone up from about 18,000 last year, to about 19,200 this year. This year, we are expecting to touch 19,500-19,600. By the end of the year, we'll cross 20,000.

What is the status of your plan to become a universal bank?

We are planning to go apply for a universal bank licence in the next financial year. Right now, we are looking at a reverse merger.

It should be completed. We have to see the RBI's approach to this whole thing. So, while we'd like to go in that direction, the approach or the feeling of the regulator is also important.

As a universal bank, we get a little bit more elbow room or concessions in terms of capital adequacy and all that. And that will help us.

What is your outlook on net interest margin (NIM) for the second quarter?

We are looking at NIM for the full year at about 9 percent. We closed the first quarter at 9.2 percent. Costs are likely to be slightly higher in the second quarter.

But we are hoping that we will manage the situation by using our liquidity management, asset liability management, and other treasury-type operations.